A 1% increase in outstanding commercial and multifamily mortgage debt during the first quarter reflects the extended duration of outstanding loans and a continued appetite for real estate investment across key investor groups.
This assessment is according to the Mortgage Bankers Association, which found that the total debt outstanding increased by $46.8 billion during the first three months of 2025 to reach $4.81 trillion.
Multifamily mortgage debt alone increased $19.9 billion, or 0.9%, quarter-over-quarter to $2.16 trillion. The increase in this category came despite lower origination volumes, according to Reggie Booker, MBA’s associate vice president of CRE research.
The four largest investment groups during the quarter were banks and thrifts; federal agency and government-sponsored enterprise (GSE) portfolios and mortgage backed securities (MBS), life insurance companies, commercial mortgage-backed securities (CMBS), collateralized debt obligation (CDO) and other asset-backed securities (ABS) issues, according to the report. Commercial banks hold the largest share of mortgages at 38%, or $1.8 trillion, while agency and GSE portfolios hold 22%, or $1.07 trillion in mortgage debt. Life insurance companies hold $752 billion, or 16%, of mortgage debt, while CMBS, CDO and other ABS issues hold $642 billion, or 13%.
Agency and GSE portfolios and MBS hold half of the total multifamily debt outstanding at $1.07 billion, followed by banks and thrifts with a 30% share at $639 billion. Life insurance companies hold 11% of the borrowings, outstanding at $242 billion, state and local governments hold 4% at $94 billion, while CMBS, CDO and other ABS issues hold 3% at $62 billion.
CMBS, CDO and other ABS issues gained the most in dollar terms of commercial and multifamily mortgage debt – $16.2 billion, or 2.6%. Banks and thrifts increased their holdings by 0.7%, or $13.1 billion, agency and GSE portfolios and MBS increased their holdings by 0.7%, or $7.5 billion and life insurance companies increased their holdings by 0.8%, or $6.1 billion.
In percentage terms, REITs saw their holdings increase the most, by 4%, while private pension funds saw their holdings decrease by 10.6%.
Banks and thrifts posted the largest dollar gains in multifamily mortgage debt, increasing by $10 billion, or 1.6%. This was followed by agency and GSE portfolios and MBS, which increased their holdings by $7.5 billion, or 0.7%. Life insurance companies increased their holdings by $1.9 billion, or 0.8%. REITs saw the largest percentage increase, up 10.9%. Meanwhile, private pension funds saw the largest decline in their holdings of multifamily mortgage debt, at 12.7%.
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